Social investment market grew by more than a quarter last year to reach record high

The social impact investment market in the UK grew more than a quarter last year to a record £6.4bn during the pandemic, according to new research. 

​​Figures released by social investor Big Society Capital show that more than £1.2bn was committed to 1,152 charities in 2020.

The data, from BSC’s Annual Market Sizing Report, estimates the value of the market has grown 26 per cent, up from more than £5bn in 2019

The latest figures show that the social impact market is about eight times the size it was in 2011, when it was worth £833m. 

Last month, BSC launched a strategy that aims to help the market grow further by up to £10bn over the next four years.

The social investment wholesaler said in its latest update that social property funds continued to account for the largest portion of the market, followed by social lending accounts.

BSC highlighted how some of this growth in the social lending sector could be attributed to funds launched in response to the coronavirus pandemic, such as the Resilience and Recovery Loan Fund, set up by Social Investment Business with funding from BSC.

Existing funds such as the Community Investment Enterprise Facility and the Growth Fund also contributed to the growth in social lending.

Stephen Muers, chief executive of BSC, said: “Social enterprises and charities have been a fundamental lifeline for many of the millions who were furloughed, made redundant, or isolated from their regular social networks and support. 

“They became frontline services for the nation and have played an important role in the recovery.

“Despite this, the mainstream funding challenges persist for many of these organisations, so it comes as highly welcome news to see the burgeoning growth of social impact investment from the private sector, alongside increasing investment from both local and national government.

“But this is only a fraction of what we believe is possible over the next few years. 

“Momentum is building and social impact investment has a huge role to play. 

“More and more investors are realising that it is possible to deliver both a social and financial return and so we are confident the market is on track to meet this ambitious target.”

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